The Federal Reserve Board’s most recent Senior Loan Officer Opinion Survey on Bank Lending Practices found that around 20 percent of banks have eased credit requirements for business loans in the past quarter. In the survey of 68 domestic banks, none reported tightening credit standards for approving commercial and industrial (C&I) loans or credit lines—other than those used to finance mergers and acquisitions—while 19.1 percent reported that these credit standards are “easing somewhat” for large and midmarket businesses and 23.1 percent reported easing standards somewhat for small companies (those with annual revenues under $50 million).
When working with large and midsize businesses, 21.6 percent of large banks and 9.7 percent of small banks have eased restrictions on the maximum size of credit lines they do approve. More than 20 percent have reduced the premiums they charge on riskier loans. One-third of banks have reduced the cost of credit lines somewhat, and nearly two-thirds have narrowed the spread of their loan rates over their cost of funds. Nearly half of large banks have eased loan covenants, while only 12.9 percent of smaller banks have done so.